Five firms together log Rs 12K cr in Q4 losses. Analysts positive on three of them

NEW DELHI: Five BSE500 companies, namely Vodafone Idea, Sun Pharmaceutical Industries, InterGlobe Aviation, Tata Motors and New India Assurance Company, reported a combined loss of over Rs 12,000 crore in March quarter.

Among them, Sun Pharma's numbers were a surprise loss due to one-off provision while InterGlobe Aviation numbers were hit by rising ATF fuel cost and Omicron-led disruptions in January.

Vodafone Idea's losses narrowed YoY, but analysts felt recent hikes in tariff are not enough and that the telecom operator needs to raise funds soon.

Notwithstanding supply-side issues, analysts are positive on Tata Motors due to its strong domestic show and likely improvement in JLR business going ahead. In the case of NIA, adverse results in foreign operations and one-time provisions on employee liability weighed on the quarterly numbers.

Net-net analysts have positive views on Sun Pharma, Tata Motors and InterGlobe Aviation, neutral to negative views on Vodafone Idea and no view on New India Assurance Company.


Vodafone Idea (VIL) reported a loss of Rs 6,563.40 crore for March quarter. This was less than Rs 7,022.80 crore loss the telecom operator had reported in the year-ago quarter. While the recent tariff hikes are positive, VIL continues to suffer from subscriber losses and the recent hike might just accentuate the same.

Unless the company is able to arrest that, the real impact of tariff hikes will not flow to the profit and loss statement, Phillip Capital said in a note last month. Analysts said the success of all its recent operational cost control measures and strategy to focus on 17 strong circles depends on it being able to find an investor. There are reports of Vi talking with Amazon for a Rs 20,000 crore investment. An average target on the stock at Rs 9.10 suggests a 3 per cent potential downside.

Sun Pharmaceuticals reported a loss of Rs 2,223 crore for the quarter, hurt by provision for settlement of antitrust litigation regarding three Ranbaxy products and certain other one time charges. Analysts, however, are positive on the stock with an average target price of Rs 989 suggesting a 19 per cent potential upside. A ramp-up in specialty sales, EM growth, high contribution to profits from India formulation (45-50 per cent) and a strong balance sheet support Sun Pharma premium valuation, Nomura said. CLSA has a target of Rs 1,060 on the counter.

InterGlobe Aviation logged Rs 1,681.798 crore in losses for the quarter but analysts are largely positive on the stock. Elara Securities has cut FY23 EPS estimates for the airline operator by 43 per cent on higher fuel cost impact.

"However, we increase FY24 Ebitda and EPS by 9 per cent and 46 per cent, respectively, on higher demand recovery, where we assume FY24 ASKM capacity at 133 billion km from 120 billion km. Consequently, we reiterate Buy and raise target to Rs 2,527 from Rs 2,252 based on revised FY24E earnings estimates," Elara said.

Another brokerage Edelweiss said: "We expect domestic PAX to normalise in FY23 as the economy is fully operational. International operations have also recovered to 90 per cent of pre-Covid levels. The 15 per cent fuel- and lease-efficient NEOs would replace CEOs in FY23, which shall enhance overall yields. Cargo revenue shall stay strong with deployment of dedicated 20 per cent wide-body freighters in 2022," it said.

Tata Motors losses came in at Rs 1,099.32 crore. While chip supply at UK subsidiary JLR improved sequentially, there still remain certain constraints led by lockdowns in China. Brokerage Prabhudas Lilladher said June quarter is expected to witness pressure led by chip shortage, inflation burden and Range Rover changeover.

"However, over FY23 new products (Range Rover deliveries from 2QFY23), demand momentum (as lockdowns in China moderate) and price pass-ons will improve profitability," it said while having a buy call on the stock. The average target price for the stock at Rs 494.83 suggests a potential 11 per cent upside, Trendlyne data suggests.

Meanwhile, in case of New India Assurance, losses stood at Rs 549.80 crore. The numbers were hit by one-time initial provisions towards employee benefits liability on account of SVRS and sick leave totalling Rs 121 crore negatively affected the domestic results. The foreign business suffered a severe setback because of additional provisions required in the UK operations due to unprecedented inflation, and some adverse claim development on large losses in the Dubai operations, which together had a negative impact of about Rs 160 crore. The investment income for the quarter was lower as the market conditions were not very favourable, the company said. This stock is thinly tracked. No analyst estimates are available for it.

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